Bud Light: What goes around finally comes around

At last month’s beer summit it was the brew of choice for the leader of the free world, Barack Obama. It is the best-selling beer in the United States and a close relative of the world’s best-selling beer.

Yet, the headlines this week have been decidedly negative.

“How Bud Light lost its sense of humor-and, subsequently, sales. Wary of 3% drop for its biggest brand, A-B dials down ‘drinkability’” reported Advertising Age.

“Anheuser refreshes Bud Light campaign. Taking on weaker sales, brewer seeks buzz by pouring more humor into new round of TV ads” said The Wall Street Journal.

First of all, was it really humor that built the Bud Light brand? No.

Second of all, have Bud Light sales really fallen? No.

Lastly, should Bud Light switch its strategy away from drinkability? No.

 

What is a Bud Light?

 Bud Light is just a watered down version of Budweiser. That is what the average consumer thinks.

That is why line extensions are always intrinsically cannibalistic. The best prospective customer of Bud Light is a Budweiser drinker who wants to avoid the calories and bloat of regular Budweiser.

By drinking Bud Light, Joe Six-Pack gets to keep his Budweiser & Clydesdales and just loses some calories. Same applies to Jane Six-Pack.

Since all major beer brands used line-extensions to move into the emerging light-beer category, the leader of the light category is obviously a line-extension.

And because no pure light-beer brands were launched, the consumer sees light beers as a flavor variation rather than a different brand. Much like what has happened in cola with Diet Coke and Diet Pepsi.

Being first is usually best, but not always. Even though Bud Light was one of the last line-extensions launched, it has become by far the most successful. Which is exactly the same as what happened with Diet Coke. The last of the diet-cola line extensions became the leader.

But is the success of Bud Light driven by its advertising? I say no. The success of Bud Light is a direct reflection of the power and leadership of Budweiser, the world’s best-selling beer brand.

The formula is easy. Take the best-selling brand, line extend it into a hot new emerging category with no competition except for other line extensions and voila! A winner is born.

Let’s be real. It was not Spuds Mackenzie that built Bud Light, it was Budweiser.

But success has come at a great cost to Budweiser. After the 1981 launch of Bud Light, initially both Budweiser and Bud Light grew in sales. But the party didn’t last. In 1988, seven years later, Budweiser hit its high-water mark of 50.6 million barrels in the U.S. Every year since, for the past 21 years in a row, Budweiser sales have declined.

People don’t change quickly; it took twenty years for light beer to fully catch on. In 2001, Bud Light overtook Budweiser and since then hasn’t looked back.

Every year since its launch, Bud Light has posted sales increases. And currently Bud Light is coming close to being twice as big as its namesake. In 2008, Budweiser sold 23.5 million barrels and Bud Light sold 44.6 million barrels.

 

 Bud Light is still King.

Bud Light has been on fire since its launch. The decline of Budweiser has been overshadowed by the raging success of Bud Light. In 2008, Bud Light sold 44.6 million barrels up from 42.7 million barrels in 2007, a gain of 4.4 percent.

What the recent articles citing Bud Light’s so-called decline fail to mention is the raging success of Bud Light’s own line-extension brand, Bud Light Lime.

Bud Light Lime has been growing rapidly. In 2008, it sold 3.3 million barrels. If you add the 3.3 million to the 44.6 million accounted for by Bud Light you get 47.9 million. So the two brands together would have grown 12.2 percent last year, an astounding rate.

Given that Bud Light Lime has been a blockbuster, it’s no wonder that Bud Light went down in 2009.

After all, who is the best prospective customer for Bud Light Lime? A Bud Light drinker that wants a twist of lime for a change.

That’s the classic pattern of a successful line extension. The line extension kills the base brand.

So perhaps we are seeing the same thing with Bud Light and Bud Light Lime.

What all this proves is that Bud Light (with all its variations counted) is still the King of Beers and far ahead of the other beer brands.

 But it also proves that line-extension is dangerous and hurts the base brand. What Bud Light did to Budweiser, Bud Light Lime is doing to Bud Light. What goes around finally comes around.

(And Select is doing nothing to nobody since nobody is drinking it. )

 

Dumping Drinkability is Dumb.

With “drinkability,” Bud Light finally found a word to own in the mind. “Drinkability” is not exciting or funny or creative but it is a powerful strategy.

Drinkability communicated the brand’s core benefit. It connects the Budweiser brand with the drinkability of a light beer.

Why do people choose Bud Light anyway? Because it is funny? No. Just ask Obama why he choose it. Obama picked Bud Light because it is a light beer and the leading brand.

Powerful strategies are usually not very exciting. Driving for BMW. Reliability for Toyota. Cowboys for Marlboro.

What makes a strategy powerful is a narrow focus over an extended period of time.

A-B InBev has claimed it’s not dropping drinkability altogether, they say they are just dialing down the word drinkability. CEO Dave Peacock says they “going back to that familiar Bud Light voice and that the work will reference drinkability, but it won’t be as drinkability heavy.”

Sounds pretty watered down and weak to me.

Comments

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Thanks! For sharing

[Guilherme]

Hey Laura, love your posts congrats.

Why don't you write a post about Nokia entering on the PC category or the new campaign for Sony, make.believe.

cheers

[alex]

Sorry for my question (I live in Europe :)). I do not uderstantand, Bud Light, is it some kind of nonalcoholic beer? If not, what it is about?

[Dr Wright]

I guess I just dont get drinkablity.

Dr. Letitia Wright
The Wright Place TV Show
http://wrightplacetv.com
www.twitter.com/drwright1

[hmartincalle]

Thank you for your post Laura. Most importantly (at least to me) is the fact that your post asks us to focus on one word. To - DIFFERENTIATE - the product. I don't know that 'drinkability' should be the word du jour for Bud Light but if it remains I bet it won't be long before some ad agency comes up with the phrase "Let the good times flow" as a theme to parlay drinkability into a larger advertising concept. Loved reading your thoughts.

[ShawnT]

Didn't DRINKABILITY first appear on the Budweiser label anyway? Going back to the Budweiser creed, which we all remembered as part of our Fraternity Rush week...Budweiser has a 'taste, a smoothness and a drinkability you will find in no other beer at any price.'
Funny how everyone thinks Bud Light just made that word up.

[Yaac]

In addition to hearing what their marketing people say, we have to take a close look at their actions. The word drinkability is a 5 syllable word that takes the bitterness out of beer to make it easier to drink. That followed by the more modern image, logo and italics lettering, makes it feel like you can take a 6 pack with you to the gym, coupled by their lime brand with gold and soft green colors, indicates that they are going through a slow rebrand of sorts. It may be signaling an effort on their part to soften their brand to fit in with today’s Metro Male and Female trends. In that respect the word drinkability may have been used transitionally, to get them from the rough and tough Joe 6 pack to the softer image they are now seeking. Reasons for ending the campaign may be 1) Drinkability negatively reflects on beer in general, implying that ordinarily, beer is undrinkable- something the king of beers would not want to message forever. 2) There is something disingenuous about supposedly being the only drinkable beer. 3) “Drinkability” as a slogan is somewhat goofy.
Obama’s drinking Bud Light at the “beer summit” was a godsend and probably pushed them way ahead of where they thought they would be in terms of the rebrand. Now that they rounded the corner, they are easing off the drinkability word and pushing ahead with the feminization if you will, of the brand. Consider this from the Wall Street Journal (Aug 11) “One of the new spots, which are currently in development, features a soft-spoken woman in a bar who is trying to get the attention of a distracted bartender. She is ignored until she does something funny. Mr. Peacock confirmed that such an ad is planned.” Humor may just be the conduit for furthering this newer brand image

[Laura Ries]

Yes, you are right on Tab.

Tab was a diet only cola. But it was basically killed by Coca-Cola when it introduced Diet Coke with aspartame and kept the saccharin in Tab. Tab also didn't have universal appeal since it was very female oriented and had a realtively weak name. (Tab stood for the alternative beverage)

Amstel is a different story. Initially only the Amstel Light brand was imported into the U.S. but it is a beer brand extended into everything as well. From Amstel Lager, to Amstel 1870 (the dark beer), to Amstel Light, to Amstel Free.

The ideal would be a brand that stood for the light category without having the "light" name on the label.

Al had several meetings with Coors in the 1970's and told them to launch Coors nationwide as a naturally light beer. Original Coors has fewer calories than Michelob Light.

Instead Coors followed the line-extension route.

Our opinion is that if Coors focused on one beer brand. And focused on owning the light category it could have been the leading beer in the U.S.

[Laura Ries]

Exactly, drinkability means you can drink them down quickly and easily without too many calories and still get drunk.

Budweiser means it is all-American. Budweiser is the leading beer in the U.S. and now around the world.

Budweiser got to be the leader by being the first national beer brand.

Bud Light has now replaced Budweiser in U.S. sales because thin is in. Today it is about getting drunk but staying skinny.

It's the beer to have when you are having 20!

[Daniel Cooper]

Who drinks Bud Light? I live in a neighborhood of New York where the bars fill with firemen and police officers. They drink Bud Light. It's not because of drinkability or humor, it's because it's a cheap high and it's not "girlie". Guys and women who want to look chiseled don't want calories. That's why the President chose it. It's a working man's drink. It's the ball game drink. It's America.

We seem to have forgotten Amstel and Tab here.

People who drink Bud Light don't drink beer for the taste. It has none. They want to get bombed. Bud Light has pukability.

[Mickey Lonchar]

As you point out, Laura, it's dangerous to look at sales results and attempt to link it back to advertising. There are always a myriad of internal and external variables that make that an exercise in tail-chasing.

That said, I've always thought the "drinkability" concept was a bit of a head-scratcher, if for no other reason than creating a made-up word Stephen Colbert-style requires you to define it in a way that means something to customers, and that is where Bud Light dropped the ball. It has the tell-tale smell of a concept that was focus grouped to death and talked more to the MarCom team than it did to consumers.

What's more, after such irreverent (and some would say sophomoric) campaigns as the "Real Men of Genius," "Whazzup," "I Love You Man," and "The Swear Jar," humor has become an integral part of the Bud Light brand. There is an implied agreement between Bud Light and its audience that it maintains its relevance when it is the "humor" brand. Something as flat (no pun intended) as a beer commercial about a made-up word received a collective "Meh" from Bud Light followers.

www.quisenblog.net

[Account Deleted]

Why drinkability is a differenciating idea?
Does it mean that all other beer brands are undrinkable? they are also drinkable i think

I dont know abt beer market much anyways
Plesae reply why do you think drinkability is a good word for Bud

[Tim Keating]

The issue of cannibalism raises an interesting question in my mind: yes, brand extensions cannibalize their core brand, but don't they sometimes keep the LINE alive? In other words, you deliberately cannibalize your own sales, because if you don't, eventually a competitor will.

[Erik]

Oh the money wasted in TV advertising that does nothing to increase sales. Are commercials supposed to be funny or to sell the product and reinforce the brand??

I agree that drinkability is a great word for a light beer. I wonder if Budweiser would have created new brands instead of line extension maybe they would be the King, Queen, and Prince of beers. We will never know. Great post.